With all the talk about reforming this country”s healthcare, no one is talking about the elephant in the room: the insurance industry. Because the truth is, insurance is not an industry; it doesn”t even belong in a free market. A free market is based on competition. Competition creates better products and services for less cost.
If I can make a better automobile for cheaper, I will capture a large enough share of the market to succeed. When someone else comes around with an even better, cheaper car, I will have to compete for market share and so goes the cycle, forever producing better products for less cost.
The problem with insurance in a free market is that the very best insurance is the one that has captured the entire market. Competition reduces the efficiency of insurance. Competitive insurance companies can”t realize the efficiency of an all-inclusive market share, so, to offer policies for less, and still make a profit, they must cut corners by denying benefits, cherry picking subscribers, and making the claims process so difficult many claims are denied for technical reasons.
Free markets are made up of companies that deliver either a product or a service. Insurance is neither a product nor a service. Insurance is risk management. It is the concept of everyone giving a little so that if catastrophe befalls any of us, there is a societal bank of resources to cushion the fall.
Insurance, in its pure sense, is a kind of communism in that the whole are contributing to the well being of the individual who has experienced a loss, with the understanding that that poor sap could be any of us.
Unfortunately, the insurance companies are directing these healthcare debates and they like to sound like they belong in the free market. They call themselves an “industry”. They call their policies, “products” and their commercials talk about excellent “service”. The fact is, insurance is an equation that predicts how many claims will be made by so many people over some time frame, so each subscriber has to contribute so much to cover the claims with enough left over for a profit.
A very large subscriber base delivers more dependable predictions, a smaller subscriber base means less dependable predictions. By dividing up the subscriber base with competition, insurance companies are actually delivering worse coverage for more money.
A doctor explained the physician”s perspective on health insurance this way: “I don”t have one boss. I have two hundred bosses, each with a different reporting method, each with its own code. And the whole point is to deny as many claims as possible.” This doctor has three full time, highly trained employees whose only job is to process insurance claims.
You may not know this, but some claims your doctor submits for reimbursement have just one chance. Get it wrong and they don”t get paid, because that”s the only way the insurance “industry” can make money.
As we proceed into a global economy it may be time to consider a new perspective on insurance, not as a free market device, but as a publicly traded, government regulated monopoly. It is time we shrug off the money and power of the insurance “industry” and implement one payer, universal health insurance in this country.
What I propose is a regulatory bureaucracy overseeing a consolidation of the insurance “industry” into one monopoly, one hugely profitable monopoly. This will be a government regulated, publicly traded company that is primarily supported by a universal personal tax. Payers could even choose their level of coverage. Say you choose a basic coverage, then only a minimum in your tax bracket is taken, but your deductible is high.
Of course the profits of this monopoly would have to be heavily regulated, but they could still deliver a dividend that will encourage investment. The rest of the profits could go into lowering the subscriber rates. The savings in the administrative costs of doctor offices, hospitals and pharmacies alone will more than pay for any set-up.
Corporations, small businesses, and sole proprietors will no longer have to invest in healthcare. Instead they can invest in research, development, and infrastructure. Other countries have similar health insurance systems, this is nothing new. It is time for this country”s leaders to challenge the elephant and do the right thing for the people they serve, instead of servicing an industry that isn”t.
John Randall Williams was a HIPAA (Health Insurance Portability and Accountability Act) specialist for a large drug company. He is now a Director of EcoArts of Lake County and a writer living and working on Cobb Mountain. His email address is: jwilli1894@yahoo.com. Opinions are those of the individual writers and do not necessarily reflect the views of the Lake County Record-Bee.
